Recent modelling by the fund suggests that the average 65-year-old retiree’s super balance will likely be exhausted after only six years of retirement, if it isn’t used up even earlier.

“The current superannuation system allows people to use up all of their superannuation in one hit before being forced to rely on the Age Pension,” said Club Plus Super’s Chief Executive Officer, Paul Cahill.

“This system and the sheer scale of Australia’s rapidly aging population will potentially see hundreds of thousands of retirees run out of funds and not be able to enjoy the retirement they envisaged.

“This situation may see many retirees sell their family homes to unlock equity and either rent, downsize or move back in with their children,” said Paul Cahill.

“As moving back in with children may be the most cost effective option for many retirees, Australia needs to prepare for this likelihood or take immediate steps to reform the superannuation system so that it is better able to support Australians wishing to enjoy a lasting and sustainable retirement.”  

A recent report by the Association of Superannuation Funds of Australia (ASFA) confirmed the majority of Australians still have only very modest levels of superannuation and that many recent retirees will need to substantially rely on the Age Pension.

A survey by Club Plus Super of 843 fund members showed that while more than half of the respondents understood how much money they will need to have at retirement age in order to meet their lifestyle goals, only one third of respondents said they were making extra contributions to their super fund.